An Employer May Permanently Modify Employee "Workweeks" to Reduce Labor Costs

28 October 2012 Labor & Employment Law Perspectives Blog

The Fair Labor Standards Act (“FLSA”) requires an employer to compensate any employee who is not exempt from its provisions at a rate that is “not less than one and one-half times the regular” wage rate paid to the employee for all work time performed by the employee in excess of 40 hours (“overtime”) during the employee’s “workweek.”  The employer retains discretion under the FLSA to set employee “workweeks,” and “workweeks” can vary depending on an employee’s classification or employer requirements provided the “workweek” for each employee consists of a consecutive period of 168 hours.  How an employer schedules its employees to work during “workweeks” sometimes causes the employer to incur overtime liability that may be avoided were different “workweeks” established by the employer.  For example, an employer who regularly schedules a group of employees to work seven consecutive twelve hour shifts during a Tuesday through Monday “workweek” with seven consecutive days off will incur 44 hours of overtime liability for each employee. Were the employees “workweek” changed to a Sunday though Saturday “workweek,” the employer’s overtime liability will be reduced by 20 hours because 60 of the work hours will be performed Tuesday through Saturday of one “workweek” and the remaining 24 work hours will be performed on Sunday and Monday of the succeeding “workweek.”

Can an employer legally change employee “workweeks” to mitigate overtime liability?  The answer is “yes,” provided any modification of the “workweek” is permanently implemented in accordance with the FLSA implementing regulations.  See, e.g., Abshire v. Redland Energy Services, 11C, 8th Cir., No. 11-3380, October 10, 2012.

The plaintiffs in Abshire contended that the FLSA prohibited their employer from changing their “workweek” to mitigate its overtime liability. The Court rejected their contentions and ruled that the FLSA was not designed to “maximize the payment of overtime” to employees; that an employer may permissibly establish “workweeks” that minimize its overtime exposure; that an employer’s effort to reduce labor costs does not contravene the purpose of the FLSA; and permanently changing an employee’s “workweek” to achieve this outcome does not contravene the FLSA. 

Accordingly, an employer may permissibly implement modifications of employee “workweeks” to reduce or eliminate its labor costs without violating the FLSA provided these are intended to be permanent and are effectuated in accordance with FLSA regulatory requirements.  However, it is advisable that an employer consult with counsel before imposing changes to employee “workweeks” to ensure that changes comply with the FLSA (and any applicable state laws), and will not violate any contractual or bargaining obligations of the employer.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights